We examine consumption and investment decisions in a life-cycle model with habit formation, stochastic opportunity set, stochastic wages and labor supply exibility. Retirement is taken into account by specifying an age at which labor earnings stop, but consumption spending continues. Explicit soluti
✦ LIBER ✦
OPTIMAL PORTFOLIO, CONSUMPTION-LEISURE AND RETIREMENT CHOICE PROBLEM WITH CES UTILITY
✍ Scribed by Kyoung Jin Choi; Gyoocheol Shim; Yong Hyun Shin
- Book ID
- 111043106
- Publisher
- John Wiley and Sons
- Year
- 2008
- Tongue
- English
- Weight
- 250 KB
- Volume
- 18
- Category
- Article
- ISSN
- 0960-1627
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This research solves the intertemporal portfolio choice problems with and without interim consumption under stochastic inflation. We assume a one‐factor nominal interest rate and a one‐factor expected inflation rate, implying a two‐factor real interest rate in the economy. In contrast to other relat